On January 23, 2026, Governor Mikie Sherrill signed Executive Order No. 7 (EO) initiating a 90-day regulatory freeze on new and pending regulations to allow the administration to review the proposed rules and confirm they align with the Administration’s policies and priorities. The freeze affects, among others, the New Jersey Department of Labor and Workforce Development’s (NJDOL) pending regulations addressing independent contractor classification under the ABC test and the New Jersey Pay & Benefits Transparency Act (NJPBTA).
What’s Frozen?: With limited exception, the EO put on hold for 90 days the proposal or adoption of:
- “[Any] rule proposed by publication in the New Jersey Register within the past 12 months, or within the past 18 months if the relevant agency has issued a notice of substantial change to the proposed rule, which has neither been adopted nor expired, or a proposal filed with the Office of Administrative Law . . . for publication but not yet published in the New Jersey Register.”
Exception: By February 2, 2026, impacted agencies were required to notify the Governor of any proposed rules whose non-adoption will, among other things, adversely impact public health, safety, welfare, or security. Based on these submissions, Governor Sherrill may rescind the 90-day freeze on any particular rule proposal or adoption at her discretion.
What Employers Should Watch:
(1) Proposed Rule: Independent Contractor Classification (ABC Test)
In April 2025, the NJDOL filed a notice of proposal for new rules to codify the agency’s interpretation of the ABC test for independent contractor status under several New Jersey laws, including the New Jersey Unemployment Compensation Law, the New Jersey Wage and Hour Law, and the New Jersey Wage Payment law. While the prongs remain the same, the proposed rules provide detailed guidance on evaluating each prong under the ABC test, as highlighted below:
- Burden of Proof: The proposed rules clarify that—“because the ABC test is written in the conjunctive” – the employer must establish that the services and the individual providing the services meet all three prongs of the test.
- Prong A: The proposed rules make clear that an employer need not control every aspect of performance for the individual to be considered an employee and set forth a non-exhaustive list of factors that may be considered in determining control.
- Prong B: The proposed rules provide guidance on the terms “usual course of business” and “places of business” with examples of each.
- Prong C: The proposed rules clarify that the employer must establish that the individual operates an existing enterprise that can survive the termination of the relationship with the employer. This determination requires an evaluation of the “totality of the facts” and may include consideration of a non-exhaustive list of factors set forth under the proposed rule.
- Additional Principles: The proposed rules set forth additional principles governing the application of the ABC test, and factors that are not determinative of independent contractor status.
For additional information on the proposed rules, see HERE.
(2) Proposed Rule: NJ Pay & Benefits Transparency Act
Effective as of June 1, 2025, the NJPBTA requires employers with 10+ employees that conduct business, have employees, or take employment applications within New Jersey to:
- Disclose in postings for new jobs or transfer opportunities (1) the hourly wage or salary, or a range of the hourly wage or salary, and (2) a general description of benefits and other compensation programs for which the employee would be eligible; and
- Make “reasonable efforts to announce, post, or otherwise make known” internally or externally advertised promotion opportunities to all current employees in the affected department.
In September 2025, the NJDOL issued proposed rules to clarify disclosure requirements and liability for third-party postings, which—as highlighted below—would:
- Require hourly or annual pay ranges to include a minimum and a maximum;
- Limit the minimum and maximum pay range spread to 60% of the minimum pay;
- Clarify that the “general description of benefits” includes health, life, and disability insurance; paid time off; training; and pension;
- Clarify that “other compensation programs” include non-wage compensation, such as commissions, bonuses, and profit-sharing;
- Define “reasonable efforts” to make known promotion opportunities to include physically posting the opportunity in the workplace, and if applicable, electronically posting it on the employer’s intranet/internet site; and
- Hold employers liable for noncompliant third-party job postings if the employer directly provided the content to the posting third party.
For additional information on the NJPBTA, see HERE.
Employer Takeaways
The EO’s 90-day freeze is scheduled to expire on or about April 23, 2026, unless lifted earlier with respect to particular rules at the Governor’s discretion. Accordingly, while employers may have additional time to prepare for compliance, they should not assume that adoption of the proposed rules will be delayed for the full 90-day period. In the interim, employers should treat the proposed rules as instructive regarding how the NJDOL intends to interpret and enforce the laws. To mitigate risk and prepare for compliance, employers should consider the following steps:
- Conduct an audit of existing independent contractor relationships;
- Review independent contractor policies, practices, and agreements to ensure compliance with the ABC test and the proposed rules;
- Revise job postings to ensure pay ranges include a minimum and a maximum, with a pay range spread not to exceed 60% of the minimum pay;
- Ensure internal and third-party recruiters comply with job posting requirements; and
- Continue monitoring developments regarding the proposed rules.
If you have any questions related to the EO or the proposed rules, or need assistance preparing for compliance, please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.